Coal power declines in Southwest Power Pool, aided by cheap gas, wind

Generation in the Southwest Power Pool is becoming more efficient and clean, and it’s being helped along by gas prices which have remained low all year. The grid operator said in a market report released in December that natural gas at the Panhandle Hub averaged $2/MMBtu in November, and the average seasonal cost was about $2.25/MMBtu. In Fall 2014, gas prices averaged $3.76/MMBtu.

SPP has also brought on more hydro resources through the addition of the Integrated System, which joined in October. Consisting of Western Area Power Administration Upper Great Plains Region, Basin Electric Power Cooperative and Heartland Consumers Power District, the power companies brought about 5,000 MW of peak demand and 7,600 MW of generating capacity to the system.

Addition of the Integrated System tripled SPP’s hydroelectric capacity, the operator said.

While coal still generates the majority of SPP’s power, the shift over the last two years is a reflection of what has been going on at the national level. Three times last year, gas generation nationally exceeded coal’s share – a first for the industry.